Brian Hayes, Rapporteur. – Mr President, I welcome the Commissioner to our discussion this evening. At the outset, I would like to thank all the rapporteurs who worked on this own-initiative report with me over the course of the last number of months, and also to thank my colleagues in the Committee on Economic and Monetary Affairs, who voted for this report in such large numbers just before the summer. I think we have arrived at a good settlement on what is not only a crucially important issue for the European Union and its relationship with third countries but also a crucially important issue for financial stability within the European Union and in the relationships we have with others.

I also want to recognise that this is a forward-looking report, trying to map out, and to achieve a considered view by Parliament about, the future equivalence arrangements that should exist in terms of our relationship with third countries.

I welcome the fact that the Commission in 2017 put forward a review of the equivalence framework. It is right and proper that we should look at our procedures in place, and equally it is right and proper that Parliament should have some role in terms of shaping that review and making sure that we have a meaningful input into its final outworkings.

We in the European Union have worked hard at reducing risk, especially since the crisis: reducing market fragmentation, and also ensuring that we have an international standard in terms of our financial regulation here within the European Union. We have international responsibility for ensuring that the international order, in terms of rule-making and rule-taking, is adopted not just within the European Union, at an inter-institutional level, but also by all Member States of the Union. So having a rules-based system sends a strong message to those members of the international community that have a third-country relationship with us about what we expect in that.

It is also fair to say that, in trying to reach that international best standard, Europe is doing its bit to reduce any of the systemic risks and threats that have been built up over past decades. There is a clear advantage in Europe being a standard bearer for good financial regulation globally and that is something we always need to keep in mind when talking about this issue. We also need to recognise that the existing equivalence regime is really a technical regime in which the Commission has extraordinary power, and we need to recognise that, in many cases, the Commission gets those decisions right on case-by-case deliberation of the issues that come before it, and on a file-by-file basis.

But that’s not to say that the framework cannot be improved – it would be a ridiculous position if there were no possibility of the regime for equivalence being improved. What we have tried to set out in this report are areas where we can improve the system in the future: areas of greater transparency in the Commission’s dealings with Parliament; how Parliament can assess and analyse some of these decisions; and a monitoring role for Parliament, making sure that decisions are taken by way of delegated acts, making sure that Parliament is fully aware of the circumstances and the position contained in decisions.

I haven’t mentioned Brexit because this report is not about Brexit, despite the fact that, when we first embarked on the own-initiative report, people were obsessed by Brexit. This is about setting our house in order, making sure that we have a system in place for the future, and making sure that system is transparent for all, and applies the best possible international standards in our dealings with third countries.

Corina Crețu,Member of the Commission. – Mr President, on behalf of the Commission I would like to thank rapporteur Hayes for his report on this work. I welcome the large consensus among political groups. Indeed, it is in our interests to have robust international cooperation, matching cross—border business activity in this area. Of course, it increases competition, consumer and investor protection and accelerates innovation in the sector and it helps public authorities ensure financial viability in the European Union.

You know very well, honourable Members, that the European Union financial system is a very open to financial service providers from many parts of the world. The European Union has adopted more than two hundred positive decisions in financial services, covering more than thirty non—EU jurisdictions. You know that that the equivalence process requires that we look at each third country in a regulatory and supervisory framework separately, sector by sector, and we do this in a proportionate and risk—sensitive manner. In this respect I welcome that the report confirms that the equivalence is the most suitable and flexible tool for relations with third countries in financial services.

Of course, it is not perfect, but compared to other alternatives, equivalence preserves the autonomy of EU decision—making and provides powerful incentives for regulatory and supervisory cooperation at international level.

The Commission agrees with the report in the same areas. The European Union framework for third—country equivalence should be further enhanced. In this regard, a number of important proposals were adopted last year. For example, the proposal to amend the European market infrastructure regulation differentiates between the treatment of systematically important third—country centre counterparties and the treatment of non—systematically important ones. The proposal also shows in which circumstances we would need to go beyond equivalence as a last resort.

Finally, we propose to clarify the role of the European Supervisory Authorities in preparing equivalence decisions. We also propose that these authorities assume greater responsibility for monitoring the situation in third countries on with the Commission has taken an equivalence decision.

Now regarding transparency, the Commission agrees that the transparency of the process for granting equivalence can be improved. Over the past three years, we have sought to raise transparency and awareness. For example, in February 2017, we published a staff document to explain our approach. The Commission is ready to come to the Parliament and keep its Members closely informed. Besides, in some of our latest proposals we have put forward the possibility for Parliament and the Council to play a more prominent role in equivalence policy by scrutinising delegating acts which set out detailed equivalence criteria to be applied to the Commission.

Lastly, the Commission agrees that equivalence will play an important role in shaping the European Union’s regulatory and economic relations with the UK once it has become a third country. Let me conclude by welcoming once again, the work of all of you and the work of the European Parliament. The Commission now, of course, counts on Parliament and the Council, as co—legislators, to continue moving as swiftly as possible in the coming months to adopt the on-going proposal. Thank you very much for your attention and for your work.